State ex rel. Linde v. Packard

• Decision Date: 10 December 1915
• Citation: 155 N.W. 666,32 N.D. 301
• Court: North Dakota Supreme Court

155 N.W. 666

32 N.D. 301

STATE OF NORTH DAKOTA, EX REL. HENRY J. LINDE, Attorney General, and Henry Amerland, Relator, v. FRANK E. PACKARD, George E. Wallace, H. H. Steele, State Tax Commission of the State of North Dakota, and as members of Such State Tax Commission, H. H. Kennedy, Robert B. Boyd, Henry Heath, Thomas C. Hockridge, William H. Lakey, County Commissioners of the County of Cass, and Addison Leech, County Auditor of the County of Cass, and as such auditor of the County of Cass

Supreme Court of North Dakota

December 10, 1915

Original writ of prohibition.

Writ issued.

Writ of prohibition issued.

Lawrence & Murphy, for plaintiff.

"The power to raise revenue by taxation is a necessary attribute of sovereignty which may be exercised by the legislature subject only to the restrictions imposed by the Federal or state Constitution." Re Lipschitz, 14 N.D. 622, 95 N.W 157.

The act in question provides a fixed and arbitrary rate of taxation upon one class and subject of property without reference to the amount of revenue necessary to be derived from the citizens of the state for public purposes, and it is violation of the Constitution. State Const. §§ 174, 179.

It is a method of taxation that amounts to discrimination. Railroad & Teleph. Cos. v. Board of Equalizers, 85 F. 317; 37 Cyc. 727, 728.

Taxes are burdens and charges imposed by the legislature upon persons and property to raise money for public purposes. 37 Cyc. 706; Carondelet use of Reuter v. Picot, 38 Mo 125.

The power of a legislature to levy or to authorize the levy of a tax, and to create or authorize the creation of a public debt to be paid by taxation, is limited to its exercise for a public purpose. Dodge v. Mission Twp. 54 L.R.A. 242 46 C. C. A. 661, 107 F. 827.

The decision of the question whether a tax or a public debt is for a public or private purpose is not a legislative, but a judicial, function. A legislature cannot make a private purpose a public purpose by its mere fiat.

"It is the policy of the law to raise taxes no faster than they are likely to be needed," and while all reasonable presumptions may be made in favor of the necessities of a new region, no presumption can stand, when overthrown by facts. Michigan Land & Iron Co. v. L'Anse Twp. 63 Mich. 700, 30 N.W. 331.

An ordinance purporting to make a permanent rate for manufacturers, merchants, banks, and trust companies, based on income, licenses, and franchises, which shall be unaffected by the fact that the rate on other property, on an ad valorem basis, may go up or down as the years go by, is void. George Schuster & Co. v. Louisville, 124 Ky. 189, 89 S.W. 689.

The Constitution intends only that a sufficient amount of taxes shall be levied and collected each year to defray the estimated expenses of such year. State ex rel. Garrett v. Froehlich, 118 Wis. 129, 61 L.R.A. 345, 99 Am. St. Rep. 985, 94 N.W. 50.

"The plan embodied in the Constitution contemplates confining the object of the state appropriations and taxation as near to the people as is practicable." State ex rel. Owen v. Donald, 160 Wis. 21, 151 N.W. 333; Warden v. Fond du Lac County, 14 Wis. 618; Dalrymple v. Milwaukee, 53 Wis. 179, 10 N.W. 141; Chicago & N.W. R. Co. v. State, 128 Wis. 653, 108 N.W. 557; Cooley, Taxn. 3d ed. 22-24.

State burdens must rest on a public, state-wide constitutional purpose. State ex rel. New Richmond v. Davidson, 114 Wis. 563, 58 L.R.A. 739, 88 N.W. 596, 90 N.W. 1067; State ex rel. Jones v. Froehlich, 115 Wis. 32, 58 L.R.A. 757, 95 Am. St. Rep. 894, 91 N.W. 115, 118 Wis. 129, 61 L.R.A. 345, 99 Am. St. Rep. 985, 94 N.W. 50.

The framers of the Constitution clearly intended to limit the raising of revenue by taxation, to the needs and purposes of each year. People ex rel. Thomas v. Scott, 9 Colo. 422, 12 P. 608; Re Appropriations, 13 Colo. 316, 22 P. 464; People ex rel. State University v. State Board, 20 Colo. 220, 37 P. 964; State ex rel. Lenhart v. Hanna, 28 N.D. 583, 149 N.W. 574.

Neither the tax commission nor other taxing power can levy a tax "for no purpose." If a levy of two mills would be sufficient to raise enough revenue for the maintenance of the government, this would be the limit of power regardless of the Constitution limitation of 4 mills. State ex rel. Lenhart v. Hanna, 28 N.D. 583, 149 N.W. 575.

"The taxes generally assessed for the state bear a proportion to the amount to be raised, and all taxable property, except that paying specific taxes, is charged with a given and equal per cent upon its assessed value." Pingree v. Auditor General (Pingree v. Dix) 120 Mich. 95, 44 L.R.A. 684, 78 N.W. 1025; Western U. Teleg. Co. v. Omaha, 73 Neb. 527, 103 N.W. 89.

A rule of valuation adopted by those whose duty it is to make assessment, which is designed to operate unequally and to violate a fundamental principle of the Constitution, and when this rule is applied not solely to one individual, but to a large class of individuals or corporations, its enforcement will be restrained. Houston v. Baker, Tex. Civ. App. , 178 S.W. 820.

Each man in the state, county, and city is equally interested, in proportion to his property, in maintaining the state, county, and city governments, and in that proportion should bear the burdens equally. Wheeler v. Weightman, Kan. , L.R.A.1916A, 846, 149 P. 978.

If there is a discrimination against any species of property, imposing an unconstitutional burden thereon, the law cannot be sustained. Railroad & Teleph. Cos. v. Board of Equalizers, 85 F. 306.

"The state has no right to take the property of individuals presently and afford them no possible return, merely because the storehouse, being filled, will be opened sometime, depending upon Providence and the majority as to when, for the enrichment or comfort of the people then in being, in which the taxpayer had no special interest which reasonably demands any such sacrifice." State ex rel. Owen v. Donald, 160 Wis. 21, 151 N.W. 366; Madary v. Fresno, 20 Cal.App. 91, 128 P. 343.

The act does not state distinctly the object of the same. "No tax shall be levied except in pursuance of law, and every law imposing a tax shall state distinctly the object of the same, to which only it shall be applied." State Const. § 175.

This means an act of the general legislature, unless there is a provision of the Constitution that is self-executing. Southern R. Co. v. Kay, 62 S.C. 28, 39 S.E. 785; State ex rel. Nieman v. Fangbouer, 14 Ohio C. C. 104, 12 Ohio C. D. 801; State v. Klectzen, 8 N.D. 286, 78 N.W. 984, 11 Am. Crim. Rep. 324.

"The law nowhere prescribes the object or use to which the money so paid is to be applied. There seems to be nothing to prevent its being extended for any legitimate county purpose or public improvement. Malin v. Lamoure County, 27 N.D. 140, 50 L.R.A.(N.S.) 997, 145 N.W. 582.

This section of the Constitution is mandatory, and the failure of the act to specify the purpose for which the tax is levied is fatal. Com. v. United States Fidelity & G. Co. 121 Ky. 409, 89 S.W. 251; Chesapeake, O. & S.W. R. Co. v. Com. 129 Ky. 318, 108 S.W. 248, 111 S.W. 334; Southern R. Co. v. Hamblen County, 115 Tenn. 526, 92 S.W. 238; Farmers' & M. Nat. Bank v. School Dist. 35 Okla. 506, 130 P. 548.

The act is void and ineffective in that it does not provide for any application, apportionment, or distribution of the revenue raised thereby. State Const. § 175; State v. Klectzen, 8 N.D. 291, 78 N.W. 984, 11 Am. Crim. Rep. 324.

Frank E. Packard, George E. Wallace, and H. H. Steele, for respondents.

"Money and credits" are included in and covered by the general laws of the state of North Dakota, referring to taxable property, and wholly independent of the provisions of the 1915 law, being chapter 255, are taxable property. The law contemplates that such property shall be listed, assessed, and taxed, and the acts done, looking to such end, have ample authority. Comp. Laws 1913, §§ 2074, 2075, 2077, 2088; State ex rel. Dorgan v. Fisk, 15 N.D. 229, 107 N.W. 191; State v. Superior Ct. 111 Am. St. Rep. 925, note C, on p. 938.

This action is improvidently instituted. The plaintiff has a plain remedy at law. The remedy by writ of prohibition does not lie. State ex rel. Terminal R. Asso. v. Tracy, 237 Mo. 109, 37 L.R.A.(N.S.) 448, 140 S.W. 888; Shortt, Extr. Legal Rem. 3d ed. P 767, B, § 436; Wilson v. Berkstresser, 45 Mo. 286; 32 Cyc. 602, note 21; State v. Superior Ct. 111 Am. St. Rep. 925, note E, p. 943; State ex rel. Dawson v. St. Louis Ct. of Appeals, 99 Mo. 221, 12 S.W. 662; State ex rel. Kenamore v. Wood, 155 Mo. 455, 48 L.R.A. 596, 56 S.W. 476; 16 Enc. Pl. & Pr. 1094; High, Extr. Legal Rem. 2d ed. PP 1716, 1752; Wood, Mandamus, 147; Lloyd, Prohibition, 48; State ex rel. Brown v. Klein, 116 Mo. 259, 22 S.W. 693; State ex rel. Hofmann v. Scarritt, 128 Mo. 331, 30 S.W. 1026; State ex rel. Alderson v. Moehlenkamp, 133 Mo. 134, 34 S.W. 468; Wand v. Ryan, 166 Mo. 646, 65 S.W. 1025; Schubach v. McDonald, 179 Mo. 163, 65 L.R.A. 136, 101 Am. St. Rep. 452, 78 S.W. 1020; State ex rel. McNamee v. Stobie, 194 Mo. 14, 92 S.W. 191; Delaney v. Police Ct. 167 Mo. 679, 67 S.W. 592.

Remedy by way of injunction is not available under the facts set forth in the plaintiff's complaint. Frost v Flick, 1 Dak. 131, 46 N.W. 508; Schaffner v. Young, 10 N.D. 245, 86 N.W. 733; Minneapolis, St. P. & S. Ste. M. R. Co. v. Dickey County, 11 N.D. 112, 90 N.W. 260; Torgrinson v. Norwich School Dist. 14 N.D. 16, 103 N.W. 414; Bismarck Water Supply Co. v. Barnes, 30 N.D. 555, L.R.A.1916A, 965, 153 N.W. 454; Merchants' State Bank v. McHenry County, 31 N.D. 108, 153 N.W. 386; Cooley, Taxn. 3d ed. p. 772, and the cases in note 2, also pp. 1415, 1445; Clarke v. Ganz, 21 Minn. 387; Savings & Loan Soc. v. Austin, 46 Cal. 417; 2...